independent

Friday 18 April 2014

ECB’s Mario Draghi gives support to Anglo debt deal

ECB President Mario Draghi

ECB President Mario Draghi has given his strongest support yet to Ireland increasingly controversial Anglo Irish Bank promissory note deal.

Speaking in Brussels today the head of the European Central Bank told members of the European Parliament that the Irish deal features "some developments that can be taken as positives."

He did not want to "pass a judgement" on the Irish deal he said, but noted it brought an end to emergency lending to the former bank from the Irish Central Bank.

That has been replaced with a tradeable government bond, he said.

The comments are part of the growing evidence that President Draghi is at odds with German's central bank over the deal.

Earlier today Germany's Bundesbank called the Irish deal "problematic."

That was a blow to the Government efforts to calm mounting criticisms of the deal, seen by some as "monetary financing," the term used to describe direct financial support for Governments by the ECB, which banned under European law.

In its monthly report the Bundesbank appears to cast doubts on the legitimacy of the deal.

"The procedure proves the increasingly stronger and more problematic inter-linkage between monetary and fiscal policy in the European monetary union," the Bundesbank said.

"The European Stability Mechanism, which should be responsible in this regard, has been established to provide any help to individual member states in servicing debt."

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